SB 331: A Terrible Deal for NorthWestern Customers

UPDATE: SB 331 failed to pass the House on 3rd reading on April 16th. It is now very likely dead, however it’s still possible coal bailout language could be inserted into other bills that are still alive.

HB 597 is openly being talked about as the target bill to insert coal bailout language. That bill is headed to a “conference committee” made up of House and Senate members. If amendments are made then the full House and Senate will have to vote on the new bill.

Please keep contacting your Representative, Senator, and the Governor and tell them to oppose a coal bailout in any form. There is plenty of time left in the legislative session for bills to become bad!

Call Governor Steve Bullock at (406) 444-3111 and ask that he oppose any coal bailout.

[Information about SB 331 begins below]

SB 331, by Sen. Tom Richmond (R-Billings), pretends to secure the future of the Colstrip plant. First, it does not do that. Second, it saddles NorthWestern’s customers with a blank check to the utility. Third, it is a gift to NorthWestern’s shareholders at the expense of its customers, and will obligate its customers to shoulder the burden of increased costs for decades to come.

As
amended, SB 331 still allows a monopoly utility to add unreviewed liabilities
and increased costs on to the electric bills of Montana customers. SB 331 still
allows NorthWestern Energy to avoid Public Service Commission oversight for the
purchase of a large generation resource. PSC oversight provides the rigorous scrutiny
that protects a monopoly utility’s captive customers. Normally the PSC
scrutinizes these types of resource purchases by monopoly utilities to make
sure customers aren’t being swindled. SB 331 still allows NorthWestern Energy
to bypass that process for the first time in Montana history (and possibly in
the nation’s history).

If
purchasing more of Colstrip is such a good deal and NorthWestern can do so
without SB 331, why does NorthWestern need SB 331? Because the company doesn’t
want the PSC to look under the hood to verify customers aren’t getting a lemon
that will costs untold millions and increase liabilities.

Once that $1 purchase
price changes hands, NorthWestern customers are on the hook for an increased
share of the $700 million cleanup of the plant. Even if the company behaves
prudently, its customers will be on the hook for increased and undetermined
cleanup costs because of SB 331.

Bypassing the PSC to buy
more of the plant, at any price, prevents the PSC from doing its job to make
sure a purchase is the least cost resource and in the customers’ best interest.
Once that purchase occurs, NorthWestern could annually pass on tens of millions
of dollars of escalating operation and maintenance costs, tens of millions of
dollars of rising fuel costs, millions of dollars of increasing annual capital
investments, and multi-millions in undetermined remediation liabilities – even
if a less expensive electricity resource is available. SB 331 would cause all
of these costs.

The bill has been amended
so many times it’s become unintelligible. This is what happened with
deregulation: the bill was rushed through late in the session with so many
amendments no one knew what they were voting on. It turned out to be a
disaster. Alarm bells should be going off now about the same thing happening.

Passing this bill is a
trap. Any amendments on the bill now will likely be stripped in a conference
committee and once again customers will be on the hook for untold costs and
liabilities without the protections provided by PSC oversight.

What You Can Do:

UPDATE: SB 331 failed to pass the House on 3rd reading on April 16th. It is now very likely dead, however it’s still possible coal bailout language could be inserted into other bills that are still alive.

Please keep contacting your Representative, Senator, and the Governor and tell them to oppose a coal bailout in any form. There is plenty of time left in the legislative session for bills to become bad!